Australian Home Loan Guides

Buying a home is the most significant financial decision most Australians ever make. Understanding how home loans work — from how repayments are calculated, to the difference between fixed and variable rates, to what government help is available — can save you tens of thousands of dollars over the life of your mortgage.

These guides are written in plain English for Australian buyers at every stage — first home buyers, upsizers, investors, and those considering refinancing. Use them alongside our free loan calculator and borrowing power calculator for a complete picture of your home loan options.

First Home Buyer's Guide to Home Loans

10 min read

Everything you need to know as a first home buyer in Australia — deposits, grants, LMI, and choosing the right loan.

How Much Deposit Do You Need?

The minimum deposit most Australian lenders accept is 5% of the purchase price. With less than 20% deposit, you will typically need to pay Lender's Mortgage Insurance (LMI), which can add $10,000–$20,000+ to your loan costs depending on the loan size and LVR. Saving a 20% deposit avoids LMI entirely and often means access to more competitive interest rates.

Government Assistance for First Home Buyers

Several government schemes exist to help first home buyers enter the market. The First Home Owner Grant (FHOG) provides a one-off cash payment — typically $10,000–$30,000 depending on the state — for eligible buyers of new homes. The First Home Guarantee allows eligible buyers to purchase with as little as 5% deposit without paying LMI, as the government guarantees 15% of the loan. Most states also offer stamp duty exemptions or concessions for first home buyers under certain price thresholds.

Getting Pre-Approval

Pre-approval is a conditional assessment from a lender confirming how much they would likely lend you. It is strongly recommended before attending auctions or making offers. Pre-approval typically lasts 90 days and requires payslips, bank statements, identification, and evidence of your deposit savings. It does not guarantee final approval — that occurs after a satisfactory property valuation.

Read Full Guide →Loan Calculator Borrowing Power

Complete Guide to Refinancing Your Home Loan

6 min read

When and how to refinance your Australian home loan to get a better rate, access equity, or consolidate debt.

When Should You Refinance?

Refinancing makes financial sense when the long-term savings outweigh the switching costs. The typical costs of refinancing are $1,000–$2,500 in discharge fees, application fees, and settlement costs. To calculate your break-even point, divide total switching costs by your monthly saving. If you save $200 per month and costs are $2,000, you break even in 10 months — worthwhile if you plan to keep the loan for several more years.

What You Can Achieve by Refinancing

The most common reason Australians refinance is to secure a lower interest rate. Even a 0.5% reduction on a $600,000 loan saves approximately $3,000 per year in interest. Beyond rate savings, refinancing can unlock equity for renovations or investment, consolidate high-interest debts, switch from a fixed rate to variable (or vice versa), add features like an offset account, or change from interest-only to principal and interest repayments.

Cashback Offers and Switching Costs

Many lenders offer cashback deals of $2,000–$4,000 to attract refinancers. These can make switching financially attractive even when rate differences are small. However, focus first on the ongoing rate — a 0.3% lower rate on a large loan is worth far more than a one-time cashback. Some lenders also offer low-rate packages that look attractive upfront but include high annual fees that erode the savings.

Loan Calculator Borrowing Power

Fixed vs Variable Interest Rates in Australia

5 min read

Compare fixed and variable rate home loans in Australia to choose the right option for your situation.

Variable Rate Loans

Variable rate loans track the Reserve Bank of Australia (RBA) cash rate. When the RBA raises rates (as it did repeatedly in 2022–2023), your repayments increase. When rates fall, you benefit. Variable rates typically offer unlimited extra repayments, offset accounts, and redraw facilities — providing maximum flexibility. The uncertainty of future repayments is the main trade-off. Most Australians hold variable rate loans.

Fixed Rate Loans

Fixed rate loans lock your interest rate for a set period — typically 1, 2, 3, or 5 years. During the fixed period, your repayments are certain regardless of RBA movements. The trade-off is reduced flexibility: most fixed loans limit extra repayments (often to $10,000–$20,000 per year), do not include offset accounts, and charge break costs if you exit the loan early. Break costs can be substantial if rates have fallen since you fixed.

The Split Loan Option

Many Australians split their loan — fixing a portion (e.g. 50%–70%) for repayment certainty while keeping the remainder on a variable rate with full flexibility for extra repayments and an offset account. For example, on a $600,000 loan you might fix $350,000 at 6.20% for 2 years and keep $250,000 variable at 6.10% with an offset account attached. This gives protection against rate rises on most of your debt while maintaining flexibility.

Loan Calculator Borrowing Power

Understanding Lender's Mortgage Insurance (LMI)

4 min read

What LMI is, how much it costs, and how to avoid it when buying a home in Australia.

What Is LMI and Why Do You Pay It?

Lender's Mortgage Insurance (LMI) is an insurance premium paid by borrowers with less than 20% deposit (LVR above 80%). Despite the name, LMI protects the lender — not you — against financial loss if you default and the property is sold for less than the outstanding loan balance. You pay the premium either upfront or (more commonly) it is capitalised onto the loan. LMI can be thought of as the 'cost of entry' for borrowers who want to buy sooner with a smaller deposit.

How Much Does LMI Cost?

LMI costs vary based on loan size and LVR. On a $600,000 loan with a 10% deposit (LVR of 90%), LMI might cost $12,000–$18,000. At 85% LVR (15% deposit), costs drop significantly to $5,000–$9,000 on the same loan. At 80% LVR (20% deposit), LMI is not required. The LMI premium is usually added to the loan, meaning you also pay interest on it over the loan term — adding further cost over time.

How to Avoid or Reduce LMI

The most direct way to avoid LMI is to save a 20% deposit before buying. Other options include: using the First Home Guarantee scheme (eligible first home buyers can purchase with 5% deposit without LMI), using a family guarantor who offers their home as additional security (allowing you to borrow at lower LVR), qualifying for a Medico loan if you are a healthcare professional (many lenders waive LMI for doctors, dentists, and veterinarians even at high LVRs), or choosing a lender that offers LMI waiver programs for certain professions.

Loan Calculator Borrowing Power

More In-Depth Home Loan Guides

→ Home Loan Repayments Explained → How Borrowing Power is Calculated → First Home Buyer's Complete Guide

Disclaimer: This content provides general information only and does not constitute financial, tax, or legal advice. Calculations are based on ATO 2025–26 rates and are estimates only. Individual circumstances vary. Always consult a registered tax agent or financial adviser for personalised advice. This service is provided by SWIFT ACCOUNTANTS PTY LTD (ABN 35 619 346 637).